Vietnam’s e-commerce market enters consolidation phase as fees rise, tax rules tighten

Vietnam’s fast-growing e-commerce sector is entering a period of consolidation as rising platform fees, stricter tax enforcement, and intensifying competition squeeze profit margins for online merchants, signaling the end of a years-long phase defined by heavy spending to capture users.

The shift comes even as overall market growth remains robust. Data from YouNet ECI show that gross merchandise value (GMV) across four major platforms - Shopee, TikTok Shop, Tiki, and Lazada - reached about VND458.16 trillion ($17.43 billion) in 2025, up 26% from the previous year.

This expansion far outpaced Vietnam’s broader retail sector, which grew 9.2% during the same period, according to the General Statistics Office.

Rising costs begin to reshape the market

Despite the strong headline growth, signs of strain emerged toward the end of 2025.

Sales volumes declined roughly 8% in the fourth quarter while average selling prices rose about 33%, reflecting higher platform service fees that forced many merchants to increase prices to offset operating costs.

At the same time, regulators have stepped up oversight of online commerce, tightening tax compliance requirements for sellers and digital platforms. The policy shift is expected to accelerate a shakeout among smaller merchants that struggle to adapt to rising compliance and operating costs.

Nguyen Phuong Lam, deputy head of the southern office of the Vietnam E-commerce Association (VECOM), said the industry is undergoing a structural transition.

“Vietnam’s e-commerce market is entering a new phase,” Lam said at an e-commerce talk show held early this month. “Growth is no longer evenly distributed as it was five to seven years ago, when platforms and sellers were willing to spend heavily to capture market share.”

The sector continues to benefit from favorable structural fundamentals, including a young population; rising internet penetration, particularly in rural areas; and the rapid adoption of omnichannel shopping habits that blend online and offline retail.

Competition, however, is intensifying as the number of merchants selling online continues to expand while new cross-border retail models and direct-to-consumer strategies from manufacturers gain momentum.

A representative from TikTok said sellers with strong operational capabilities, product quality, and brand development strategies will gain a competitive edge as the market matures. Compliance will also become increasingly important as Vietnam prepares to implement revised e-commerce legislation expected to take effect in July 2026.

Merchants shift toward efficiency and brand building

Industry executives say the market is gradually moving away from aggressive discounting and marketing campaigns toward a model focused on operational efficiency and long-term brand development.

Nguyen Minh Duc, VECOM deputy secretary, said years of aggressive promotions and steep discounts have fueled a “race to the bottom,” eroding brand value and attracting consumers primarily motivated by price.

As the market matures, customer data is becoming a critical strategic asset. Companies are increasingly relying on data analytics to understand purchasing behavior and tailor marketing messages, timing and distribution channels to improve conversion rates without relying heavily on discounts, he noted.

Over the longer term, building strong brands and emotional connections with consumers will become essential for companies seeking to escape pure price competition.

Analysts expect the next two to three years to bring a wave of mergers and acquisitions alongside the exit of weaker players unable to adapt or lacking financial resources. the consolidation process could ultimately leave Vietnam with a smaller but more resilient e-commerce ecosystem, with advantages shifting toward companies capable of combining efficient operations, strong branding, and integrated digital retail solutions.